Recent Blog Posts

  • The Hidden Power and Benefits of a College Education IRA
    Ok…so the real name of an IRA that can be used for education expenses is called a Coverdell Education Savings Account (Coverdell ESA).  However, for simplicity sake, we in the accounting world generally refer to these powerful little gems as the “Education IRA”. Regrettably, not everyone in the accounting world believes the Education IRA to be a precious gem.  Mostly because they don’t understand their hidden benefit and strategy.  Thus, in my opinion, the 529 college savings plans are oversold to the public and no one really talks about the Education IRA. Let me set the record straight and share what I think to be one of the most incredible ways to save for college education. First, the good news: Think of a Coverdell ESA as simply an IRA…any investments inside the IRA grow tax free and come out tax free for any qualified education expenses (typically tuition, books, fees, ... Read more
  • Is Redeeming Airline Miles Taxable?
    The IRS has been wanting to tax the redemption of airline miles or credit card points for years, and although they haven’t succeeded yet, there are still strategies to be aware of. Some common examples of credit card rewards that do not need to be reported as income are cash-back programs, travel miles bonuses, accumulated points towards future purchases, and credit card sign-up bonuses that require a financial transaction, such as making a purchase, to be realized. The IRS considers the redemption of these rewards a “discount” or a “rebate” on those purchases, instead of income to be taxed – how altruistic of them! Now for the bad news – that “free” bonus or reward that you got just for signing up probably isn’t tax free. Why? Because unlike with rewards that you earn as you make purchases when you get a bonus just for signing up, or switching cards, ... Read more
  • What is a COPE for Asset Protection?
    A Charging Order Protection Entity (COPE) is a unique type of entity that can provide additional protection for the assets it holds from the owner’s personal liabilities. It is far more advanced and complex than the average LLC. The COPE is generally structured as a Limited Liability Company (LLC) and state legislatures around the country have created these types of entities to help potential debtors and cause problems for creditors seizing and selling their assets. This entity’s goal is to protect what’s inside the COPE LLC, not just provide the typical LLC benefit of protecting the outside owners and managers from the operations of the LLC. For example, let’s assume you are in a car accident caused by your texting and driving. As such, you might be facing a major liability, but with a COPE LLC holding your assets, it would generally be difficult for the creditor to get ‘into’ ... Read more
  • New 2019 U.S. GAO Report on IRA Prohibited Transaction Exemptions
    The Government Accountability Office (“GAO”) issued their most recent report on self-directed IRAs and concluded that the IRS and DOL should do more to collaborate on prohibited transactions in IRAs. The report and the GAO’s work was an excellent analysis of some of the issues facing IRA owners. There were two significant sections in the report for Self-Directed IRA accounts: Prohibited transaction exemption applications and IRAs with large balances likely being self-directed. Prohibited Transaction Exemption Applications An IRA owner may request an exemption for a prohibited transaction by making a formal written request to the DOL. While the IRS enforces the prohibited transaction rules, the DOL has interpretative authority and is the agency who can grant exemptions. An exemption must be obtained in advance of the transaction and takes on average one year to obtain. A common prohibited transaction exemption request is one where the IRA owner owns real estate ... Read more
  • Maintaining Your S-Corporation
    I wish that it was as easy as just filing a form with the State and you have magical tax savings and bullet-proof asset protection, but that’s simply not the case.  Operating your business in the S-Corporation format can provide some amazing benefits, but if we don’t take care of the basics it could cause a lot of unexpected problems. The reality is that the tasks can be easy and fairly affordable.  Here are the items to check off on your “to-do list” when it comes to maintaining your entity and you’ll truly reap some tax benefits and have a serious level of asset protection. Here is your ‘to-do-list of 7 things to be aware of if you want to PROPERLY maintain your S-Corp: 1. Annual Maintenance- It’s easy and affordable to simply make sure you hold your annual Shareholder and Director meetings.  If you haven’t done your ‘Minutes’ ... Read more
  • How to Find the Best Rental Property this Year!
    I meet one on one with at least 1,000 clients a year to discuss their business ventures, tax planning and most importantly their rental properties.  Inevitably, we are going to talk about wealth building and rental property is going to be critical to the discussion.  Every year I learn more and more from my clients regarding what is working and what isn’t.  I truly am the lucky one!! As your attorney and CPA I need to speak up!!  I need to share these common themes and strategies that my successful clients are using to buy rentals.  I’m not a realtor, I’m not a broker…but I am an investor, I too own rental property, and am consistently looking for rentals and study all I can on the topic.  Please accept my humble opinion on 6 strategies that can help you find the ‘best rental property’ you can this year. 1. Buy ... Read more
  • The Perils of Investing with Friends, Family and Church Members
    Every week our firm gets call from clients around the country who have lost money by investing with friends, family or neighbors they trusted—but who were not licensed to sell securities or did not properly document the relationship as a partnership. Many of these new clients have given someone a short-term, high-interest loan with a promissory note that has not been repaid. Others have invested money with someone who claimed to be achieving spectacular returns from investing in real estate, commodities, or foreign currency. Some invested into these ‘projects’ directly out of their retirement plan and wonder if now ‘all is lost’. Nearly in every case there is a guarantee of unusually high returns with no risk, and of course, they have never missed a payment. However, by the time they call our office, the money is gone, their calls are being ignored and they want legal advice on what ... Read more
  • Why Buy Your Parent’s Home and Rent it Back to Them
    Believe it or not, it could actually be a really smart move to buy your parent’s home and rent it back to them. In fact, there are several ways to handle a parent’s home depending on their particular health or financial situation. But a bare minimum, even if you don’t use a sale/leaseback strategy your parents should have a Revocable Living Trust to ensure the orderly and effectively transfer of the home to the family and avoid probate in states where the expense can be significant.   However, some of you may have alternative goals and purchasing the home to rent back to your parents could be a wise strategy.  With a simple transaction, your parents could gain immediate access to their home equity, stay in the home, and you’d pick up some generous new tax deductions.  Here is a summary of a few other hidden benefits: Access to Cash.  ... Read more
  • Ways to Succeed at Tackling Student Debt
    Student loans cause a great deal of stress in the lives of many Americans. From keeping track of payment deadlines or living in constant fear of not being able to make their next payment; the whole process can be overwhelming. Bottom line, even if you are making payments chipping away at your student debt, it can often be a never-ending and unforgiving process. Surprisingly, 1 in 6 adult Americans have some form of Student debt. But what’s even more shocking, is that that many of these same debtors didn’t know that in 2007, Congress created a program called “Public Service Loan Forgiveness”. Essentially, under this program, if a debtor is willing to work for 10 years in the public sector working for example a government agency, or a non-profit organization, then the debt is completely forgiven. The debtor still needs to make the minimum payments each month during the 10 ... Read more
  • Practical Checkbook Procedures for your Business to Succeed
    As we have been working through tax returns for clients this tax season, it’s alarming to see how many clients aren’t maintaining their checkbook properly, or not even having a separate checkbook at all for each of the companies they own and operate. I’m not just talking about a tax savings strategy… I’m also talking about saving you from a potential lawsuit and also losing your sanity. It’s critical that each company a business owner forms has a separate checkbook for several reasons. Let me suggest five reasons that could truly prove invaluable. Corporate Veil. First and foremost, maintaining a separate checkbook substantiates the “corporate veil”, one of the primary reasons for forming a new company. Having a separate checkbook shows that the owner recognizes the company is a separate and distinct entity and hopefully encourages the owner to not “co-mingle” personal and business funds. Tax Savings. Second, a ... Read more
  • Your Business is Never Too Small to Consider an Employee Handbook
    Having an Employee Handbook can make a huge difference in deterring a future lawsuit with employees.  It can also help you tremendously in creating a more positive work atmosphere and increasing efficiencies.  A properly drafted Handbook sets forth the guidelines, expectations and most importantly the policies of your business. When employees know exactly what is expected of them it reduces their stress and allows them to better focus on their duties.  It also removes questions and concerns about the grey areas of vacations, time off, dress code, benefits, and a whole host of other important topics that need to have clarity in a business. We’ve felt for years, that there are 3 primary reasons to create a quality Employee Handbook, and then review and maintain it on a regular basis. Increased Productivity. In fact an Employee Handbook can be even more important for a small business than a large corporation. ... Read more
  • The Hottest Smart Phone Apps and Software for Your Business
    I LOVE to use my Smartphone and iPad, but even love it MORE when it saves me time AND money. With today’s access to technology we are really losing out if we aren’t constantly looking for the newest and best software available. Well to help in this effort, below is a list of Applications and Software Products to enhance your business.  I’ll also be covering this topic in depth on the Radio Show. Check it out here if you missed it LIVE or the Podcast. Listen HERE!!! In the meantime, here are some of the hottest Apps for business owners today.  Please leave a comment below if you want to suggest others. Kohler Tax Savings – YES!! My own App (powered by Deductr)!! Track your mileage, scan receipts, upload all of your banking and credit cards to QuickBooks and track your finances all in one location. Get it HERE!! EverNote – ... Read more
  • Do I Need a Living Trust?- What You Need to Know
    Millions of Americans die each year without any type of estate plan in place, and this forces their families into the court system, where they experience huge expenses with probate and significant time delays when they would rather be mourning. Nobody wants to think about dying, but being prepared for a disaster is important in every instance, and dying with your assets disorganized could be just that: a disaster. In fact, more than 50 percent of Americans don’t even have a will or any type of estate plan whatsoever. So is a ‘Will’ the simple answer for everyone, certainly not. Many need to take a little extra time and money to implement a revocable living trust (RLT) as part of a coordinated estate plan.  It could your family thousands of dollars later and tons of time. Truth be told, there are a number of reasons for an RLT, and far ... Read more
  • Why a Series LLC May be Right for You
    Most business owners understand the concept and importance of isolating assets or ventures that may expose them to personal liability. As a result, business owners have historically had to pay to create separate Limited Liability Companies (“LLCs”) for each property, asset, or business venture. Various states have tried to resolve the problem of having multiple entities and the administrative cost it creates by enacting statutes to create “Series LLC” laws. When structured properly and respected, a Series LLC gives its members limited personal liability from claims that arise from within the entity and charging order protection from claims arising outside of the entity, just like a normal LLC. What makes a Series LLC different is its ability to provide for the establishment of designated “series” or “mini-LLCs” within the original LLC (“Parent LLC”).  Each series of the Parent LLC can have its own specified property, assets, investment objective, or ... Read more
  • When to Use a Benefit Corp
    By Mark J. Kohler, CPA, Attorney   These new types of corporations have been around for twelve years and are now recognized in twelve states throughout the country. The first state in the Union to pass this new legislation was Maryland in April 2010, and as of January 2019, Arizona, California, Colorado, Delaware, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Washington D.C. have all passed laws recognizing Benefit Corporations.   Recently I have had more and more clients asking about these types of companies and if they are a good choice for them in their business. I am still somewhat skeptical and caution clients to not get caught up in the hype.   The main purpose of this type of company is to provide a sort of ‘public awareness’ that your company is different and better than ... Read more